Tejon Ranch earns $1 million a month selling water in Q1

By Patric Hedlund—published May 15, 2014—The price of water is going up and Tejon Ranch Company (TRC) reported to its shareholders Monday, May 12 that it is now in the privatized water business. It has earned a handsome $3,002,000 during the first three months of 2014 (Q1) in water sales alone.

According to TRC representative Barry Zoeller, the water is purchased from the Nickel Family LLC, which has sparked controversy. TRC’s Tejon Mountain Village partner, DMB Associates, has purchased (for the next 70 years) 8,900 acre feet of Nickle Family LLC’s annual 10,000 acre feet water allocation. DMB hoped to pump it to a developer building 12,000 homes in Redwood City (on the San Francisco Peninsula).

But that was Kern River water, part of a deal with the Kern County Water Agency. Three years ago, pundit Lois Henry of The Bakersfield Californian pointed to questions about turning this public resource into significant private gain.

Zoeller carefully stated that TRC’s privatized water windfall “went to a variety of water users in Kern County” (rather than to customers outside of the county).

The first quarter earnings report also said that administrative costs for the company dropped by $407,000 in Q1, due in part to a decrease in stock compensation expense. Former CEO Bob Stine retired last year, after collecting and trading quite a lot of stock. Gregory S. Bielli is now president and chief operating officer.

The financial report said that water sales offset a decline in farming revenue of $2,355,000, due to a 67% decrease in the number of almonds sold in Q1. Mineral resource revenues plunged by $602,000. But rock and aggregate operations, including the National Cement lease, improved over Q1 of 2013, with “an increase in royalties of $168,000 driven by improved construction activity in our region.

“Commercial / industrial revenue also increased $220,000, due primarily to an increase in development fees related to the construction of The Outlets at Tejon.”

TRC’s total capital value at the end of March 2014 was about $326 million, with debt at less than two percent, cash and securities of $57 million and $30 million in lines of credit to meet any short-term funding needs, the report said.

Centennial, Grapevine, TMV

Tejon Ranch Company is continuing to invest in “completing the entitlements for the Centennial and Grapevine projects and [to] begin pre-development investment for Tejon Mountain Village,” the report added.

Pacific Crest Trail Conservation Easement

Zoeller confirmed a report last week that the company has delivered a 10,000 acre conservation easement to the Tejon Ranch Conservancy to realign the Pacific Crest Trail fromf the Mojave Desert and back across the crest of the Tehachapi Mountains on the ranch, as specified in an agreement outlined six years ago in 2008.

This is part of the May 30, 2014 online edition of The Mountain Enterprise.